The Reasons Behind Celsius Stock’s Decline Today

Celsius (NASDAQ: CELH) stock took a hit today, dropping 17% as of 12:30 p.m. ET following the release of new Nielsen data. The energy drink maker saw sales growth decline to 39% for the week ending May 18th, compared to 37% in the first quarter of 2024. Despite the growth, Celsius experienced a dip in market share from 10.8% to 10.5%.

Adding to the negative sentiment, Morgan Stanley analyst Dana Mohsenian warned that Celsius could face slower growth as it surpasses the initial boost from its PepsiCo deal. However, investors should not overlook the company’s long-term potential.

While Celsius may not see triple-digit sales growth like before, it still presents a promising investment opportunity. The company is expected to achieve its best retailer shelf space gains this year, with spring shelf resets potentially leading to a growth bump in July. With the support of PepsiCo’s distribution network, Celsius can compete with industry giants like Monster and Red Bull.

Moreover, Celsius has ambitious plans for international expansion, with recent agreements with Suntory to enter markets in the UK, Ireland, France, New Zealand, and Australia. International sales currently make up only 5% of the company’s revenue, indicating significant growth potential.

Despite the stock’s volatility, Celsius remains deserving of its premium valuation. Investors should consider the company’s long-term growth prospects and international expansion as key factors in their investment decisions.